Weekly Reports | Sep 27 2024
This story features HEALIUS LIMITED, and other companies. For more info SHARE ANALYSIS: HLS
Broker Rating Changes (Post Thursday Last Week)
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HEALIUS LIMITED ((HLS)) Upgrade to Neutral from Underweight by Jarden.B/H/S: 0/0/0
Healius announced the sale of Lumus imaging to Affinity Equity Partners for net consideration of $825m.
Jarden highlights the price is around $250m higher than the expected valuation and will facilitate the paydown of some $361m in debt by Healius.
Management has slimmed down the business with a few divestments making Healius the second largest pathology company in Australia, although the company has been losing market share, the broker notes.
A return of pathology volumes is considered integral to the business going forward. The stock is upgraded to Neutral from Underweight with the target price lifting to $1.67 from $1.41.
JUMBO INTERACTIVE LIMITED ((JIN)) Upgrade to Buy from Overweight by Jarden.B/H/S: 0/0/0
Jarden attributes part of Jumbo Interactive’s share price weakness post FY24 results to management’s conservative guidance which illustrates a more normalised jackpot season post a record 55 jackpots in FY24.
The analyst views the underperformance of the stock by -16% is now overdone and Jumbo Interactive is trading notably lower than the three-year average historical valuations.
Jarden raises EPS forecasts by 5.8% for FY25 to FY27 for stronger SaaS total transaction value growth; a small share buyback in FY25 which is offset from increased employee costs.
The target price lifts to $15.50 from $14.70 with the stock upgraded to Buy from Overweight post the fall of -10% in the share price post the FY24 results.
MACQUARIE TECHNOLOGY GROUP LIMITED ((MAQ)) Upgrade to Buy from Hold by Petra Capital.B/H/S: 0/0/0
While Petra Capital keeps a $87.81 target for Macquarie Technology, the rating is upgraded to Buy from Hold after the share price has fallen from a recent high of $98.35 down to around $81.00.
The broker believes investors need to be positioned in the stock for likely positive news regarding contract wins prior to ‘go-live’ for the IC3 Super West facility, even though practical completion is two-years away.
IC3 has 45MW of power available on day one, an important factor for global customers, stresses the analyst.
In a further scenario analysis, Petra Capital also highlights a de-merger of the group’s data centre assets would realise significant value.
SPARK NEW ZEALAND LIMITED ((SPK)) Upgrade to Overweight from Neutral by Jarden.B/H/S: 0/0/0
Jarden highlights a long-term positive view on Spark New Zealand from the mobile business contribution which continues to grow. The analyst revises earnings forecasts for the outlook on mobile, increasing market share loss in broadband and ongoing declines in voice.
The build out of Spark New Zealand’s data centre projects to 38MW are included in the analyst’s forecasts with an additional 15MW over FY25-FY26 with the broker exploring a 50:50 joint venture on the first 38MW which would realise NZ$500m from a sale of 50% and bring in capital for further data centre build outs.
Target falls to NZ$3.98 from NZ$4.28.
Rating upgraded to Overweight from Neutral.
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CORE LITHIUM LIMITED ((CXO)) Downgrade to Sell from Neutral by Jarden.B/H/S: 0/0/0
Jarden lowers its target for Core Lithium to 8c from 10c and downgrades to Sell from Neutral after revised forecasts for the Finniss hard rock lithium mine introduced the need for around $250m of new funding and working capital.
These changes are made despite the apparently positive announcement of a 223% increase to BP33, the potential second ore source to feed the Finniss operations, explains the broker.
In the absence of compelling and plausibly funded project economics to provide valuation support, the analysts suggest Core Lithium is increasingly an exposure to exploration.
KMD BRANDS LIMITED ((KMD)) Downgrade to Overweight from Buy by Jarden.B/H/S: 0/0/0
Jarden lowers its target for KMD Brands to NZ67c from NZ70c and downgrades to Overweight from Buy following a “difficult” FY24 due to weakness for the Kathmandu brand.
Wholesale channel destocking also weighed on Rip Curl and Oboz in FY24, explain the analysts, though green shoots have been spotted in the 2H.
The trading update for the first eight weeks of FY25 shows improvement in Kathmandu, which Jarden weighs against ongoing weakness in 1H25 wholesale orders. Its view is more work is needed to build confidence in a turnaround for Kathmandu.
SIMS LIMITED ((SGM)) Downgrade to Neutral from Overweight by Jarden.B/H/S: 0/0/0
Following a 1Q trading update for the Metals business, Jarden raises its target for Sims to $12.50 from $12.00 but downgrades to Neutral from Overweight after recent share price strength.
The broker is encouraged by the turnaround in the North America (NAM) segment suggesting it offers the greatest improvement opportunity via pivoting towards domestic customers and consolidating regional markets.
Reducing NAM’s exposure to global trading markets provides another avenue for improvement, according to the analysts.
SELECT HARVESTS LIMITED ((SHV)) Downgrade to Market Weight from Overweight by Wilsons.B/H/S: 0/0/0
It is Wilsons view Select Harvests announced a disappointing trading update with guidance for FY24 at the lower end of consensus despite improved almond prices.
Slower cash collection resulted in higher net debt for year-end due to problems with the transition to a new freight operator. The company’s $80m equity raising will assist in lowering gearing levels and improve the balance sheet, Wilsons highlight.
Target price falls to $4.57 from $5.53 because of lower earnings forecasts from FY26 onward and higher working capital expectations.
The rating is downgraded to Market Weight from Overweight.
| Order | Company | New Rating | Old Rating | Broker | |
|---|---|---|---|---|---|
| Upgrade | |||||
| 1 | HEALIUS LIMITED | Neutral | Sell | Jarden | |
| 2 | JUMBO INTERACTIVE LIMITED | Buy | Buy | Jarden | |
| 3 | MACQUARIE TECHNOLOGY GROUP LIMITED | Buy | Neutral | Petra Capital | |
| 4 | SPARK NEW ZEALAND LIMITED | Buy | Neutral | Jarden | |
| Downgrade | |||||
| 5 | CORE LITHIUM LIMITED | Sell | Neutral | Jarden | |
| 6 | KMD BRANDS LIMITED | Buy | Buy | Jarden | |
| 7 | SELECT HARVESTS LIMITED | Neutral | Buy | Wilsons | |
| 8 | SIMS LIMITED | Neutral | Buy | Jarden | |
Price Target Changes (Post Thursday Last Week)
| Company | Last Price | Broker | New Target | Old Target | Change | |
|---|---|---|---|---|---|---|
| ALQ | ALS Ltd | $14.10 | Goldman Sachs | 14.85 | 15.60 | -4.81% |
| Jarden | 14.20 | 14.90 | -4.70% | |||
| ASB | Austal | $2.85 | Petra Capital | 3.23 | 3.21 | 0.62% |
| BSL | BlueScope Steel | $21.41 | Jarden | 23.00 | 22.90 | 0.44% |
| BTH | Bigtincan Holdings | $0.17 | Canaccord Genuity | 0.20 | 0.40 | -50.00% |
| CAJ | Capitol Health | $0.36 | Canaccord Genuity | 0.32 | 0.27 | 18.52% |
| COI | Comet Ridge | $0.17 | Petra Capital | 0.29 | 0.35 | -17.14% |
| COL | Coles Group | $18.21 | Goldman Sachs | 18.00 | 16.30 | 10.43% |
| CXO | Core Lithium | $0.10 | Jarden | 0.08 | 0.10 | -20.00% |
| EVN | Evolution Mining | $4.64 | Jarden | 3.25 | 3.13 | 3.83% |
| HLS | Healius | $1.73 | Jarden | 1.67 | 1.41 | 18.44% |
| JLG | Johns Lyng | $3.71 | Canaccord Genuity | 6.10 | 6.23 | -2.09% |
| Moelis | 5.11 | 5.03 | 1.59% | |||
| KCN | Kingsgate Consolidated | $1.46 | Canaccord Genuity | 2.90 | 3.20 | -9.38% |
| LOT | Lotus Resources | $0.29 | Canaccord Genuity | 0.52 | 0.54 | -3.70% |
| Petra Capital | 0.33 | 0.37 | -10.81% | |||
| MYX | Mayne Pharma | $4.57 | Canaccord Genuity | 6.25 | 6.69 | -6.58% |
| PXA | Pexa Group | $15.00 | Jarden | 14.90 | 14.45 | 3.11% |
| SGM | Sims | $12.33 | Jarden | 12.50 | 12.00 | 4.17% |
| SHV | Select Harvests | $3.68 | Wilsons | 4.57 | 5.39 | -15.21% |
| TTM | Titan Minerals | $0.43 | Canaccord Genuity | 1.30 | 0.13 | 900.00% |
| WOW | Woolworths Group | $33.35 | Goldman Sachs | 40.10 | 39.40 | 1.78% |
| Company | Last Price | Broker | New Target | Old Target | Change | |
More Highlights
ASB AUSTAL LIMITED
Commercial Services & Supplies Overnight Price: $3.00
Petra Capital rates ((ASB)) as Buy (1)
Petra Capital forecasts Austal’s earnings (EBIT) will rise by around $30m/year over an extended period after securing a new submarine module fabrication contract with General Dynamics Electric Boat (GDEB).
Austal will receive US$450m of special US Navy incentives to build (and own) the requisite fabrication facilities at its shipyard in Mobile, Alabama.
The broker reiterates its Buy rating, and the target rise to $3.23 from $3.21.
This report was published on September 25, 2024.
Target price is $3.23 Current Price is $3.00 Difference: $0.23
If ASB meets the Petra Capital target it will return approximately 8% (excluding dividends, fees and charges).
Current consensus price target is $3.26, suggesting upside of 12.5%(ex-dividends)
The company’s fiscal year ends in June.
Forecast for FY25:
Petra Capital forecasts a full year FY25 dividend of 3.00 cents and EPS of 11.10 cents.
At the last closing share price the estimated dividend yield is 1.00%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 27.03.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 13.5, implying annual growth of 229.3%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 21.5.
Forecast for FY26:
Petra Capital forecasts a full year FY26 dividend of 12.50 cents and EPS of 25.10 cents.
At the last closing share price the estimated dividend yield is 4.17%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 11.95.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 18.0, implying annual growth of 33.3%.
Current consensus DPS estimate is 2.0, implying a prospective dividend yield of 0.7%.
Current consensus EPS estimate suggests the PER is 16.1.
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources
INR IONEER LIMITED
New Battery Elements Overnight Price: $0.21
Canaccord Genuity rates ((INR)) as Speculative Buy (1)
Canaccord Genuity highlights the final Environmental Impact Statement for ioneer’s Rhyolite Ridge Lithium-Boron project in Nevada has been announced.
The analyst also notes the US Fish and Wildlife Services stated the project will not “jeopardise the endangered Tiehm’s buckwheat of adversely impact on habitat”.
These announcements are viewed as milestones for the company with a final investment decision expected at the end of 2024.
The Speculative Buy rating and 35c target are retained for ioneer.
This report was published on September 20, 2024.
Target price is $0.35 Current Price is $0.21 Difference: $0.135
If INR meets the Canaccord Genuity target it will return approximately 63% (excluding dividends, fees and charges).
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources
LOT LOTUS RESOURCES LIMITED
Uranium Overnight Price: $0.23
Canaccord Genuity rates ((LOT)) as Speculative Buy (1)
Lotus Resources updated scoping study on its Letlhakane uranium project in Botswana. Canaccord Genuity highlights the update includes average annual production of 2mlbsp.a. from 3.5mlbs p.a. and a 15-year mine life, down from 20 years.
The expected initial capex is -US$488.5m against the broker’s previous forecast of -US$526m.
Lotus Resources has stated a total cash cost of US$42/lb versus the analyst’s previous forecast of US$40.8lb.
The Speculative Buy rating remains. Target price falls to 52c from 54c.
This report was published on September 19, 2024.
Target price is $0.52 Current Price is $0.23 Difference: $0.29
If LOT meets the Canaccord Genuity target it will return approximately 126% (excluding dividends, fees and charges).
Current consensus price target is $0.54, suggesting upside of 107.7%(ex-dividends)
The company’s fiscal year ends in June.
Forecast for FY25:
Canaccord Genuity forecasts a full year FY25 dividend of 0.00 cents and EPS of minus 0.30 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is minus 76.67.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is -0.4, implying annual growth of N/A.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is N/A.
Forecast for FY26:
Canaccord Genuity forecasts a full year FY26 dividend of 0.00 cents and EPS of minus 0.50 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is minus 46.00.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 2.8, implying annual growth of N/A.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 9.3.
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources
SMI SANTANA MINERALS LIMITED
Gold & Silver Overnight Price: $2.37
Canaccord Genuity rates ((SMI)) as Initiation of coverage with Speculative Buy (1)
As part of the Bendigo-Ophir mine in New Zealand, Santana Minerals is currently developing its Rise and Shine deposit, which Canaccord Genuity highlights is the largest single New Zealand gold discovery in more than 40 years.
The broker begins research coverage with a Speculative Buy rating and $3.00 target.
In April, a scoping study detailed a 10-year operation producing an average of 110koz per year, with low-quartile costs (AISC) of $1,057/oz, highlights the broker. The study was based on an initial eight-year staged open pit and four-year underground mine.
Santana Minerals compares favourably to peers in gold mining development, suggests Canaccord Genuity, with compelling capital intensity and relatively high open pit grades over a long life-of-mine.
This report was published on September 20, 2024.
Target price is $3.00 Current Price is $2.37 Difference: $0.63
If SMI meets the Canaccord Genuity target it will return approximately 27% (excluding dividends, fees and charges).
The company’s fiscal year ends in June.
Forecast for FY25:
Canaccord Genuity forecasts a full year FY25 dividend of 0.00 cents and EPS of minus 8.00 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is minus 29.63.
Forecast for FY26:
Canaccord Genuity forecasts a full year FY26 dividend of 0.00 cents and EPS of minus 12.00 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is minus 19.75.
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources
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CHARTS
For more info SHARE ANALYSIS: CXO - CORE LITHIUM LIMITED
For more info SHARE ANALYSIS: HLS - HEALIUS LIMITED
For more info SHARE ANALYSIS: JIN - JUMBO INTERACTIVE LIMITED
For more info SHARE ANALYSIS: KMD - KMD BRANDS LIMITED
For more info SHARE ANALYSIS: MAQ - MACQUARIE TECHNOLOGY GROUP LIMITED
For more info SHARE ANALYSIS: SGM - SIMS LIMITED
For more info SHARE ANALYSIS: SHV - SELECT HARVESTS LIMITED
For more info SHARE ANALYSIS: SPK - SPARK NEW ZEALAND LIMITED